2002 - OPEC

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16 Stock movements At the end of 2002, OECD commercial oil stocks displayed a strong draw of 154 million barrels or 420,000 b/d over 2001 to 2,467m b (see Table 6). This level covered 51 days of forward consumption, four days lower than the level registered the previous year. Most of the draw took place on crude oil inventories, which fell by 99m b, or 270,000 b/d to 1,105mb, followed by product stocks, which declined by 55m b, or 150,000 b/d to 1,362m b. On a regional basis, North America was the main contributor to the draw on OECD commercial stocks, where they decreased by 91m b to 1,172m b, followed by OECD Pacific and OECD Europe, where they showed draws of 33m b to 410m b, and 30m b to 885m b, respectively. Several factors were behind the draw on OECD stocks, mainly increasing refinery runs in the US and Europe to meet demand, especially for distillate, due to cold weather conditions, and the interruption in supplies from Venezuela due to the general oil workers’ strike. The draw on Japan’s stocks resulted from a strong increase in demand for heating oil, which resulted from shutdowns of nuclear power plants. In contrast to the draw on OECD commercial oil stocks, the Strategic Petroleum Reserve (SPR) in OECD regions registered a build of 57m b to 1,343m b. This build took place mainly in the US as SPR levels increased by 49m b to 601m b in line with the Government’s decision to bring its total level up to 700m b by 2005. Oil on water, which includes oil in transit and oil afloat, declined by 18m b to 811m b. The above stock movement changes resulted in a draw on total world oil stocks of 141m b or 390,000 b/d to 5,639m b during the year. Balance of supply and demand As indicated in Table 7, the significant increase in non-OPEC supply, compared with the slower rate of increase in world demand, resulted in a supply/demand difference of around 25.5m b/d. OPEC crude oil production declined significantly by around 1.9m b/d to 25.3m b/d, resulting in a near balanced supply/demand picture. This represented a minor stock draw of around 100,000 b/d. Oil price movements The yearly average of the OPEC Reference Basket moved up by $1.24/b on a y-o-y basis (2002 vs 2001). It ended the year at $24.36/b with a healthy rise of 5.4 per cent, with most of the gains occurring in the second quarter when the Basket rallied by a healthy $4.68/b (see Figure 3, page 18). The bullish sentiment prevailed throughout the year. Concern over low crude oil stocks and possible supply interruptions from some OPEC Member Countries were the dominating factors in the price rally. This was exacerbated by the looming threat of a US-led invasion of Iraq, which drove the OPEC Basket price well above the upper limit of the price band towards year-end.
Table 6 Closing stock level (outside FCPEs) Q102 Q202 Q302 Q402 OECD onland commercial 2,598 2,645 2,567 2,467 OECD SPR 1,303 1,314 1,319 1,343 OECD total 3,901 3,959 3,886 3,810 Other onland 1,043 1,059 1,039 1,019 Oil on water 791 800 802 811 Total stocks 5,735 5,818 5,727 5,639 Table 7 Summarized supply/demand balance m b/d 2000 2001 Q102 Q202 Q302 Q402 2002 02/01 World oil demand (a) 76.2 76.7 76.8 75.2 77.1 78.8 77.0 0.3 Non-OPEC supply 1 (b) 49.1 50.0 51.2 51.6 51.3 51.9 51.5 1.5 Difference (a–b) 27.1 26.7 25.5 23.6 25.8 26.9 25.5 –1.2 OPEC crude oil production 2 28.0 27.2 25.1 24.6 25.5 26.2 25.3 –1.9 Balance (stock change & misc) 0.8 0.5 –0.4 1.0 –0.4 –0.7 –0.1 –0.7 Note: 1. Including OPEC NGLs and non-conventional oil. 2. Selected secondary sources. Totals may not add up due to independent rounding. m b/d Growth In late 2001, the OPEC Conference announced that it would reduce its overall production level by an additional 1.5m b/d, with effect from January 1, 2002, provided that non-OPEC nations also reduced their production. Pledges to cut output and/or exports totalling 462,500 b/d were made by Angola, Mexico, Norway, Oman and the Russian Federation, and OPEC, therefore, confirmed its own output cuts at the Consultative Meeting of the Conference in Cairo, on December 28, 2001. As a direct result, bullish sentiment gathered strength and all the Basket components registered gains across the barrel. However, higher inventory levels amid a market in contango, together with milder seasonal demand, exerted pressure on the price. 17
Page 2 and 3: Organization of the Petroleum Expor
Page 4 and 5: 4 Welcome to the 2002 edition of th
Page 6 and 7: 6 OPEC in the World Economy The glo
Page 8 and 9: 8 badly affected by drought but rap
Page 10 and 11: 10 OPEC production OPEC production
Page 12 and 13: 12 Figure 1: OPEC 1 and non-OPEC 2
Page 14 and 15: 14 Table 5 World supply/demand bala
Page 18 and 19: 18 Figure 3: Weekly movement of cru
Page 20 and 21: 20 Table 8 Average monthly spot pri
Page 22 and 23: 22 during the year pushed Caribbean
Page 24 and 25: 24 Table 10 OPEC foreign downstream
Page 26 and 27: 26 Press Release No 1/2002, Vienna,
Page 28 and 29: 28 Reference Basket had fallen by a
Page 30 and 31: 30 prices is partially a reflection
Page 32 and 33: 32 The Conference expressed its app
Page 34 and 35: 34 Activities of the Secretariat Of
Page 36 and 37: 36 On trade-related issues, two stu
Page 38 and 39: 38 3) Individual subscribers receiv
Page 40 and 41: 40 the OPEC Headquarters and transm
Page 43 and 44: Heads of Delegation ALGERIA HE Dr C
Page 45 and 46: ALGERIA HE Abdelhadi Benzaghou (lef
Page 47 and 48: Officials of the Secretariat SECRET
Page 49 and 50: OPEC Secretary General, Dr Alvaro S
Page 51: 3 rd Informal Brainstorming Session

2002 - OPEC

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